Towne v. St. Anthony & Dakota Elevator Co.

77 N.W. 608, 8 N.D. 200, 1898 N.D. LEXIS 38

Opinions

Wallin, J.

This is an action brought to recover damages for the alleged conversion of plaintiff’s wheat, and was tried to the Court, under the provisions of chapter 5 of the Session Laws of 1897. The trial court filed its findings of fact and conclusions of law, and a statement of the case was settled, in which are embodied specifications of alleged errors of law, and likewise of particulars wherein appellant claims that the'findings of fact are not supported by the evidence. Such specifications are, however, not required, under the act of 1897. Farmers’ & M. Nat. Bank v. Davis, 8 N. D. 83, 76 N. W. Rep. 998. The rule of this Court requiring specifications was framed at a time when this Court sat only for the correction of errors, and prior to the statute of 1893, which so completely revolutionized the practice in cases tried below without a jury. This rule, it is true, was perpetuated in the amended rules of this Court, but the same is now in force and governs in jury cases only. Id. In this case, as will appear later, appellant has conformed to the requirements of the act of 1897, and specified in the statement certain questions of fact which it desires this Court to reinvestigate or retry.

Almost every fact which enters into the case is controverted but for the purposes of the decision we shall accept the respondent’s version of the facts, except upon the decisive question of whether the defendant, when it received the wheat, had notice of the plaintiff’s rights in the wheat, or sufficient notice thereof to put it upon its inquiry with respect thereto. For the purpose of the decision, the material facts will be epitomized as follows: In 1892 the plaintiff was the owner of a tract of land situated in Cass county, and at that date entered into a written contract with one Adam Murry to sell him the land on what is known as the “crop payment plan.” By the terms of the contract, Murry was to have possession of the land, and was 'required to put it in crop each year until the land was paid for. The contract further stipulated as follows: “One-half of the grain to be sown and grown on said premises in each and every year hereafter, and during the continuance of this contract, beginning with the crop of the year 1893; said one-half of grain to be delivered in the elevator or on the cars at Erie, Cass county, North Dakota, or at some other convenient point not more remote, as said first party shall direct, within a reasonable time after threshing the same, and free of all expense or charge to the first party; said grain to be delivered in the name of the first party (the plaintiff), and to be by the first party promptly sold, and the proceeds thereof applied, first, in payment of interest on said sum at eight per cent, per annum, and, second, in reduction of said principal sum.” Under this contract, Murry went into possession, and farmed the land until and including the year 1895. 'In that year Murry raised a crop of 1,048 bushels of No. 1 Northern wheat, and on the 16th and 17th days of September, 1895, delivered all of said wheat to the defendant’s elevator at Erie, Cass county; and the defendant issued storage tickets in the usual form therefor, but such tickets were issued to Murry in Murry’s name, and the proceeds thereof were subsequently appropriated by Murry, and the plaintiff has never received any part of said wheat or its proceeds. On receiving the grain, the defendant mingled the same with other grain in its 'elevator of like kind and grade. Subsequently, but at what date does not clearly appear, defendant, in the usual course of its business, shipped the grain out of the state.

It is not claimed by the respondent that the act of receiving the wheat into its elevator or mingling the same with other grain in a general mass, constitutes a conversion of the grain by the defendant. No such claim would be tenable if made, because the contract provides in terms that Murry shall deliver one-half of the grain in the elevator at Erie, where the same was delivered. But respondent contends that the act of issuing storage tickets for the grain in the name of Murry, being in violation of the explicit terms of the contract, was an act inimical or adverse to the rights of the plaintiff, who owned the grain, and especially so as the contract provided that the title of all such grain should remain in the plaintiff until after the delivery of one-half thereof was made by Murry. The plaintiff must be regarded as having directed, or at least assented to, the mixing of her grain with other grain of like kind in the elevator, in view of the known usages of the warehousemen in this state who receive grain for storage. See Bank v. Wilder, 34 Minn. 149-156, 24 N. W. Rep. 699. We are disposed to accept the view of the respondent’s counsel, and sustain their contention, as to the abstract legal proposition that the act of delivering the storage tickets and the whole thereof, to Murry and in his name, if done after notice of plaintiff’s rights, was an act adverse to the rights of the plaintiff, and of such a prejudicial nature as would constitute a conversion of the property, for which an action would lie. The proposition is elementary. 26 Am. & Eng. Enc. Law, 714, and notes. But in the case at bar the contention of the appellant is that the defendant was without notice of plaintiff’s rights in the wheat under the contract; and this contention is, in our judgment, the pivot upon which the decision of this case must turn.

It is conceded that the written contract was never filed in the office of the register of deeds, and hence that defendant did not have at any time constructive notice of the existence or terms of the contract. But plaintiff’s contention is that the defendant had actual noticq of the contract, or at least notice of facts sufficient to put defendant upon inquiry to ascertain the particular terms of the instrument. The testimony upon this question is within a limited compass. The defendant’s agent, who received the wheat into the elevator, testified positively that, when he received the grain, he had no knowledge or notice whatever of plaintiff’s rights or claims to the wheat; nor is there any evidence in the case that such agent had ever had any notice or knowledge of plaintiff’s claims at any time until a date sribsequent to the delivery of the wheat tickets, pursuant to the order of Adam Murry. One William H. Best gave his deposition, and in plaintiff’s behalf, and testified that he was the agent of the plaintiff, and represented her, in negotiating the sale of the land, and also acted for the plaintiff with respect to the crop of "1894, raised by Murry on the land, and during all the time in question was the sole agent of plaintiff with respect to her ■rights under the contract. This witness was asked: “You may state, if you know, what knowledge the defendant or its agent at Erie, at the elevator or warehouse at' Erie, where Adam Murry delivered the wheat in question in 1895, had of the contract (Exhibit A), and of the rights of the plaintiff in question to the grain grown upon the premises in 1895, on or before the delivery of the grain so grown in 1895 to that' elevator. A. I had had the same trouble with the same people over seed liens on this crop in 1894. Payment of the wheat was held by the company. I notified them of this contract, and of the claim, and 'also the agents at Erie. I had to put up a bond before they would pay me for the wheat tickets of the crop of 1894.” It will be observed that the question of plaintiff’s counsel is somewhat involved, and was framed ingeniously so, as to call for an answer as to the witness’ knowledge of any notice brought home to the defendant or its agent at Erie of plaintiff’s rights under the contract to the crop grown on the land in 1895. The answer of the witness, however, refers only to á transaction occurring the year previous, and. one relating wholly to the crop of 1894. This answer embraces all the evidence in the record touching the subject of defendant’s notice of plaintiff’s rights in the crop of 1895, had or received by the defendant, until a date 'subsequent to issuing the storage tickets in question. The answer therefore is decisive upon the point of notice or want of notice. In the light of this testimony, it is proper to note that the controversy of 1894 did not arise between the plaintiff, on the one side, and Adam Murry, on the other. The plaintiff and the defendant were then at loggerheads, and the point of the dispute was the refusal of the defendant to cash plaintiff’s wheat tickets, which tickets must then have been in the witness’ possession, until' a seed-lien claim was taken care of, nor were the tickets cashed until plaintiff “put up a_ bond.” This bond, it seems, was required as indemnity to defendant against any loss on account of the seed lien. The matter of the seed lien being adjusted, the plaintiff’s tickets were cashed, and the trouble over the 1894 crop was at an end. Such a controversy, from its nature, did not, in bur opinion, call • for any examination of the land contract for the purpose of considering the respective rights of the parties thereto, and especially so as to their rights in crops to be grown on the land in future years. So far as appears, the crops of future years were' not mentioned in the controversy over the crop of 1894. The fair inference from the testimony is that defendant had received the crop of 1894 ■from Murry, and that neither Murry nor aiiy one else then claimed any adverse interest in the crop represented by plaintiff’s storage tickets, except the holder of the seed lien. Under these circum stances it is unreasonable to suppose that the defendant would enter into the matter of the respective rights of Adam Murry and the plaintiff to future crops grown on this land, as such rights are affected by the lengthy written contract defining such rights. The evidence lends no warrant for the inference that the contract itself, or a copy thereof, was ever delivered to the defendant’s' agents or officers, or read to any of them at any time. The witness says: “I notified them of this contract, and of this claim.” The phrase “this claim” could refer only to the claim the witness was then pressing upon defendant’s attention, viz: a claim to have the tickets for the 1894 crop cashed. That was the only claim the witness then had. The statement that he “notified them” in its very form excludes the idea that he showed the contract to the defendant’s representatives, or read it to them. If the witness had done so, it is reasonable to infer that he would have so testified. His silence here, when it was to his interest to speak, is important, and to our mind significant. As we have seen, the occasion did not call for an examination of the contract itself, or of any scrutiny of its terms with reference to the respective rights of the parties thereto. Under such circumstances, it would suffice to satisfy the defendant’s agents, as prudent business men, to be notified by the witness in a general way that plaintiff had a contract under which the particular tickets then involved — i. e. tickets for the crop of 1894- — belonged to the plaintiff, whose agent then had the same in hand. To our mind it would be wholly unwarranted to hold that the defendant is chargeable with notice (arising from the transaction occurring in 1894) that the plaintiff would be the owner of one-half of any crop raised on the land by Adam Murry for an indefinite number of years in the then future.. We see in the transaction of 1894 no fact reasonably calculated to awaken inquiry as to thé disposition of any future crop to be raised by Murry upon the land. To our-mind it is clear that no reference need have been made by the witness to the terms of the contract in question in order to meet the exigency of the transaction then being had between him and the defendant. At that time no one claimed the proceeds of the plaintiff’s tickets, save only to satisfy a seed lien held by a stranger. Under such circumstances it seems but natural to suppose that only a general reference was made to the contract; and that, only, to explain the patent and undisputed fact that the plaintiff owned the tickets for the crop of 1894, and had a right, as such owner, to receive the proceeds thereof. We therefore hold that the defendant received the crop of 1895 lawfully, and without any notice or knowledge of the rights of this plaintiff thereto.

It is conceded that, as an innocent bailee receiving the' wheat for storage, the defendant did not convert the wheat to its own use, nor in mingling the wheat with other grain, as it is usual to do in the course of its business, did the defendant do an unlawful act, for which an action in the nature of trover will lie. These acts, having been done in good faith, and with no notice of the plaintiff’s rights, clo not in themselves constitute a conversion, or give rise to a cause of action in favor of ■ the plaintiff. • It is true that the wheat at all times was the property of plaintiff, and, being so, the wrongful act of her agent in talcing storage tickets in his own name could not devest the plaintiff of her title to the wheat. But it is elementary, in a case where a bailee takes possession innocently, and without notice of the plaintiff’s rights, that a demand is an essential prerequisite to an action either fbr the property in specie or its value. See Sanford v. Elevator Co., 2 N. D. 6, 48 N. W. Rep. 434; Plano Mfg. Co. v. Northern Pac. Elevator Co. (Minn.) 53 N. W. Rep. 202; Gillett v. Roberts, 57 N. Y. 28; Ely v. Ehle, 3 N. Y. 506; Abernathy v. Wheeler, 92 Ky. 302, 17 S. W. Rep. 858; Parker v. Middlebrook, 24 Conn. 207. Under the rule laid down in these cases, a demand before suit was indispensable; but plaintiff’s counsel contends that the record shows that two separate demands of defendant for the wheat were made in plaintiff’s behalf before the action was instituted. Appellant’s counsel claim that the evidence fails to show a proper demand; but, for the purposes of the decision, we will assume that the demands were made and that they were properly made. The first of these demands was made about the last day of September, 1895, and the last at some date not definitely shown, bht which was subsequent to the first demand. Under the facts of this case, the refusal to deliver the wheat to the plaintiff upon her proper demand therefor was prejudicial and wrongful, and operated as a conversion of the wheat, and would therefore entitle the plaintiff to recover the value of the grain on the date of such demand and refusal, with interest. Rev. Codes, § 5000. But this record is devoid of evidence of the value of the wheat in controversy at any time other than on the 16th and 17th days of September, 1895, at which time the price of the wheat was 41 cents per bushel, as shown by the testimony. There being no evidence in the case as to the price of the wheat at the date of the demands, or either of them, the Court is not in a position to direct the entry of judgment for the value of the wheat when the same was converted to the use of the defendant. It is obvious that this Court cannot take judicial notice of the market price of wheat at any particular date, and especially so at a date more than three years prior to the retrial of the case in this Court. Nor does evidence of the price in the middle of September, 1895, suffice to inform this Court of the price at the end of said month of September.

Respondent contends, further, that the evidence discloses that the defendant shipped the wheat out of the state at a date prior to the institution of this action, and that this was done in hostility to the plaintiff’s rights, and hence will operate as a conversion without demand. Whether, under the facts of this case, the shipment of the wheat out of the state, in ignorance of the plaintiff’s rights, would operate as a conversion, is a point of some difficulty perhaps; but the question need not be disposed of now, because the date of the shipment cannot be definitely ascertained from the evidence, and, .if it could be, there would be a total absence of testimony showing the value of the wheat at the date of such shipment, or at any date subsequent to the shipment. There being no evidence of the value of the wheat at the time of the demand therefor, or when it was shipped out of the state, the plaintiff cannot recover. The apparent hardship of depriving the plaintiff of the value of her wheat is somewhat mitigated by the fact that it was largely by reason of her own fault that the defendant innocently received the wheat, from another party, and paid for the same. The District Court is directed to reverse its judgment, and enter a judgment dismissing the action. All the judges concurring.